illimity’s Direct Banking

February 11, 2021

Carlo Panella's editorial

Head of Direct Banking

Direct Banking is a fundamental part of our wider strategy at illimity. It provides retail funding to the whole bank, and crucially, is expected to be a real engine of our future growth.

2020 presented us, as it did everyone in our country and around the globe, with exceptionally challenging circumstances due to the Coronavirus pandemic. In this period the role of digital channels has increased. This area represents an investment in illimity strategy and is the base for future business that we are working on. The economic potential is here to come.

Thanks to our clear vision, and the current projects already underway - from Hype to our “white label” open banking platforms - we are set up for the future on a sure footing.

Vision for Direct Banking

Huge advances in technology and regulation - as well as the accelerating effect of the pandemic - have given strong momentum to the world of direct banking. More and more customers are moving towards three types of banking, and illimity has already created innovative responses to each of these.

The first group is those who want to keep a full banking service, but with simpler, more transparent and comprehensive services and onboarding procedures. To meet this demand, we have, which exceeded expectations in 2020 from several standpoints. We secured over €1 billion work of retail funding, and the cost of funding decreased by almost a quarter (24%) from December 2020 to January 2021. 86% of customers are active, and it is the principal bank used by most of its customers. And we have an NPS (Net Promoter Score) of 45, at the top of the industry. All in all, it is difficult to find any other player with such KPIs, so we can say that our initial mission of collecting stable deposits and developing a firm customer base has been accomplished.

The second sizable and growing group of customers is those who do not want a formal bank but are looking for easy-to-use FinTech platforms to make payments and transact with other services. For this, we have partnered with Hype, by far Italy’s largest open banking platform. We entered this joint venture only in September 2020, and already have some very positive updates. The integration phase is well under way, and 21 colleagues from illimity have moved over to Hype. Since September, Hype customers have grown by 50,000 to currently total 1.4 million, and the next few months will see Hype cement its position as the open banking market leader.

And the third group is those looking for “white label” platforms. These are customers of large, non-financial companies looking for customized versions of our platform, embedded in their business model and managed directly by themselves. We expect to make some exciting announcements in this new frontier shortly, which will widen illimity’s reach as a bank.

IT architecture – illimity’s secret weapon

Our unique IT architecture - fully in cloud, data and analytics-based, and with the very best FinTech solutions - offers competitive advantages which will become even more visible in 2021 and beyond, as it drives our competitiveness and scalability.

It is the enabler of so many of illimity’s achievements across the bank, ensuring we were the first bank in Italy to have PSD2 functionality, could switch our employees to smart working in less than 24 hours when the pandemic hit, manage UTP portfolios in less than six months and set up a specialized NPL management platform in just half a year. You would be hard pressed to find another bank in Europe whose IT architecture encompasses these features. It is yet another cornerstone as we construct our new paradigm bank.